The Perilous Price of Oil - The New York Review of Books - The Diigo Meta page

• 24 May 09
  

  W21st NYC

  Soros oil credit crisis

• 19 Apr 09
  

  Brent Cochran

  Energy economy oil

• 06 Oct 08
  

  Andrew N.
• 27 Sep 08
  

  Frank Colcord

  System Dynamics Cui bono Economics

• 11 Sep 08
  

  John L. Knight

  oil george_soros

• 09 Sep 08
  

  georoad

  oil soros energy economics price finance

• 07 Sep 08
  

  Tomislav Medak

  With respect to the oil market in particular, I believe there are four major factors at play which mutually reinforce one another. Two of them are fundamental and the other two are "reflexive" in the sense that they describe tendencies in the market that themselves affect the supposedly fundamental conditions of supply and demand.
  
  First, the cost of discovering and developing new reserves is increasing, and the depletion rate of aging oil fields is accelerating. This goes under the rather misleading name of "peak oil" —namely that we have approached or reached the maximum rate of world output. It is a misleading concept because higher prices make it economically feasible to develop more expensive sources of energy. But it contains an important element of truth: some of the most accessible and most prolific sources of oil in places like Saudi Arabia and Mexico were discovered forty or more years ago and their yield is now rapidly falling.
  
  Second, there is a "reflexive" tendency for the supply of oil to fall as the price rises, reversing the normal shape of the supply curve. Typically, as the price of a product rises, producers will supply more. For oil producers who expect the oil price to rise further, however, there is less incentive to convert oil reserves underground into dollar reserves aboveground. Oil producers may calculate that they will be better off if they exploit their reserves more slowly. This has led to what may be described as a backward-sloping supply curve. In addition, the high price of oil has enabled political regimes that are both inefficient and hostile to the West to maintain themselves in power, notably Iran, Venezuela, and Russia. Oil production in these countries is declining.
  
  Third, the countries with the fastest-growing demand—notably the major oil producers, together with China and other Asian exporters—keep domestic energy prices artificially low by providing subsidies. Therefore, rises in prices do not reduce demand as they would under normal conditions. This may be considered o

  economy oil

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  raman srinivasan

  The Perilous Price of Oil
  By George Soros
  
  The following is adapted from testimony given by George Soros before the US Senate Commerce Committee Oversight Hearing on June 3, 2008.
  
  In January 2007, the price of oil was less than $60 per barrel. By the spring of 2008, the price had crossed $100 for the first time, and by mid-July, it rose further to a record $147. At the end of August it remains over $115, a 90 percent increase in just eighteen months. The price of gasoline at the pump has risen commensurately from an average of $2.50 to around $4 a gallon during this period. Transportation and manufacturing costs have risen sharply as well. All this has occurred at the same time as a world credit crisis that started with the collapse of the US housing bubble. The rising cost of oil, coming on top of the credit crisis, has slowed the world economy and reinforced the prospect of a recession in the US.

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  oil

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  Charles Rusnak

  soros indexing margin requirements economics government Energy

• 06 Sep 08
  

  T. Rex Bean

  georgesoros oil bubble energy 2008

• 05 Sep 08
  

  vrevans VRE

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